| Popis: |
Activists appear to play an important governance role, but identifying it empirically remains challenging. We examine a private dataset of engagements in small UK companies in the 2008- 15 period. Our activist receives a blind portfolio; has low incentives and financial resources; engages alone, behind-the-scenes; and deals in illiquid under-researched firms. These features help us to focus on the treatment (as compared to the selection) effect. Consistent with a positive governance effect of shareholder activism, we find that the engagements generate positive annual returns for the period (+1.4%), especially in confrontational situations (+4.9%), and have persistent impacts on firms’ operating performance. |
